China’s Real Estate System Is Failing || Aug 27, 2026
You know what happens when you do exactly what the Chinese government tells you to do? You get sentenced to life in prison. That just happened to Evergrande's former chairman, and it tells you everything you need to know about China's failing real estate system.
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Comments (36)
Actually its a healthy maket rectification.
Peter! You neglected the fact that Chinese government encourages citizens to own gold! Chinese demand drives gold prices. Did you miss this somehow?
Look behind you Peter there’s a predator in the trees ( great video though)
I’m not doubting that Peter is correct but I’d like to understand a concept in this video better. Why does a company having access to negative rate interest rates lead to negative returns for investors?
So how do Chinese citizens get all the money out of the country to buy North American realestate and companies?
A background noise filter or wind remover plugin is practically free in Adobe or DaVinci..
In my last visit to China I remember walking around several cities, and coming away with the notion that they were doomed. That was at the tail end of the construction boom, and construction had to have been about 15-20% of local GDP, closer to a third of local GDP with knock-on effects from service industries supported by construction. Any city taking a 30%+ economic hit would be reeling, but Chinese urban infrastructure is rickety... a lot of it was slap-dashed into existence. For example, in almost all Chinese cities, the tap water isn't potable. For drinking water, city dwellers rely on a crazy-quilt network of guys in small trucks and motor-scooters who deliver those 5-gallon water cooler jugs... that's the drinking water logistics supply for cities of 30 million people! Food isn't much better. It's easy to see that breaking down when a third of the population becomes functionally unemployed / unable to pay. On the farm they'd return to subsistence, but in the city they could reach a point where food and water supply get really sketchy.
I'm not sure what is worse, Trump or Xi economics...
I don't understand the connection why Chinese access to "below-market" loans would by itself make them bad investments. Sure, it allows unprofitable companies to stay alive, but anything more?
Change "loan" to "subsidy." If a company is getting "loans" that they never have to pay back, they can sell products to the world at low prices and never have to worry about being "profitable." There is no reason at all for this company to worry about boosting their share prices or to create a business worth investing in.
So, Chinese residential real estate is really cheap right now?!? Huh.
Don’t they have a big culture of buying gold?
Thinking of India.
I am sure Mr Zeihan’s analysis is quite accurate…. He is such a refreshing voice in today’s world of misinformation and hyperbole. But I have a question for him. I keep reading how the Chinese auto industry is now the world’s largest with its cars selling worldwide and apparently very desirable. The Chinese robotics industry seems to be ahead of everyone else. And its space industry is up and coming. They must be doing something right. Will the Chinese electric car industry take over the world?
Good question. You should repost it on the page dedicated for questions specifically for Peter.
I don’t think this is an accurate assessment of the situation in China. They already beat us on infrastructure building and housing construction, it’s a mature sector, and you shouldn’t be using real estate as an investment vehicle to begin with, we’ve seen here in the US that it is an incredibly shortsighted thing to do. Construction is falling because they already won, they have a state of the yard Transportation system, they’ve eliminated homelessness. If you look into their manufacturing sector, it employs fewer people, but it’s getting ever greater returns and increases output due to automation so they will generate returns with fewer people, they now lead the world in Green tech innovation, especially after president dumbass, and the rest of the Epstein people he surrounds himself with have done everything they can to stop wind and solar. I think it’s just safe to say China is working off of a different model from the United States and you can’t apply the same standards you would use here in the US or Europe to what they’re trying to do. I mean, just looking around the United States, we have roads that we refuse to fund, we have criminals in our government that are making money off of destroying public infrastructure and a war machine with no manufacturing capacity behind it.
You are completely off base here. Put your conspiracy fever dream to the side; China has overbuilt production and subsidized unprofitable industries. You can build cities with no people and bridges to nowhere and high speed train with little or no passengers, also green tech that produces electricity in the wrong place. But... in time you will need to produce profit or the whole thing fall aprt. Plus, China is building "dirty" coal plants way faster than anything green. Those cool electric cars run on coal. At this point, I wonder why you are here? You clearly have not read Peter's books nor heard what he is saying.
Nw weather satellite
How does gold and silver factor into the equation? Are precious metals a feasible investment option for Chinese citizens?
Good question! The amount purchased by Chinese citizens in gold has increased by 28% in one year. Still, gold is a fickle investment for long-term growth; it is more of a stable investment.
How is the 4x number computed? Peter always says you can’t trust the numbers out of China. Also I heard they were actively demolishing buildings to reduce inventory, so sorry investors but now that is zero. Maybe you can increase average space per person too, eg buy your neighbors’s apartment and take down a wall. Then more space for children too!
Most real estate investors in China own two or more properties and rarely live in them. Unlike most other places, the Chinese consider a apartment that has been lived in or furnished as a negative and is worth less than a concrete shell.
China is such a tough one to predict - warning signs all over the place, but impossible to really know how resilient the system actually is and which ones will prevail in the new order. That's a lot of untapped cash.
Dang, 4x the amount of tofu dredge apartments than people who can use them.
This will ripple through to the Australian economy which has as its largest export iron ore for the Chinese construction industry.
You'd think so but with BHP shares being at an all time high, I'm struggling to get my head around it
I just watched an episode of Danny Jones on Youtube. He was interviewing a Chinese professor that explained how wealthy Chinese citizens were getting their money out using the Mexican cartels. The cartel would buy property in the USA. Then, the Chinese would do a "business venture" with the cartel. Now they have an overseas "business" venture with the cartel. The would inflate prices and do shifty bookkeeping to pay off the cartel and the cartel transfers ownership of the property to Chinese national. Very interesting podcast.
That "Chinese professor" is a scam. He is the Chinese Tucker Carlson/Candice. The comedy is they're all probably on the CCP payroll.
No one has been born since the 90s! Wow, the Chinese be old.
The current estimate in China is that there is one child born to every two couples. That’s unsustainable. There are various analyst who estimate the child’s population is actually closer to 850 million if not less, definitely not 1 billion or over 1 billion.
oh you can definitely put money into the Chinese market you just can’t take out that money once you put it in.
How different is the forced investment regime for the Chinese middle class than for our middle class? Not as much as one would think. Through index mutuals, 401Ks, and other pension funds, we are forced to "invest" in this overblown AI market mess which will no doubt collapse spectacularly, and soon. When it does, the "too big to fail" companies that forced us into this debacle will demand a bailout from guess who, middle class Americans! Government officials, completely beholden to these corporations and financially interwoven with them, will heartily agree, and squeeze us dry. Think it can't happen? It already did, in a much smaller way, in 2008. We are really not very different from China.
Two worlds apart.
👁️ wonder if David Teper (High-Roller-Investor) is still as Bullish now as He was three years ago. He never really got that huge stimulus package he expected. He came out and said ... buy everything Chinese.
People who think China will be the next world power are painfully ignorant
Don't underestimate the orange moron's ability to pull us down.